Source Document
Manual of Regulations for Banks
BSP.MORB.2023.Sec903.p2.OBL4
Manual of Regulations for Banks > 903 SCOPE OF REGULATIONS > 903
Obligation Summary
Where host-country law or a supervisory directive blocks proper implementation of this Part, the AMLA/TFPSA or their IRR, the covered person must both notify the Bangko Sentral (with the relevant local laws/directive) and put additional measures or mitigating controls in place to manage ML and TF risks.
If the host country does not permit the proper implementation of this Part or any of the provisions of the AMLA, as amended, the TFPSA, or their Implementing Rules and Regulations (IRR), and other AMLC and Bangko Sentral issuances by reason of local laws, regulations or a supervisory directive, the covered person shall (1) formally notify the Bangko Sentral of this situation and furnish a copy of the applicable laws and/or regulations or the supervising authority’s directive, as the case may be; and (2) apply appropriate additional measures or mitigating controls to manage the ML and TF risks.
MORB, Sec. 903, p. 2 (2023 ed.) · Manual of Regulations for Banks · p. 2
Pursuant to Section 20 of the General Banking Law of 2000, a bank authorized by Bangko Sentral to establish branches or other offices within or outside the Philippines shall be responsible for all business conducted in such branches and offices to the same extent and in the same manner as though such business had all been conducted in the head office. A bank and its branches and offices shall be treated as one (1) unit.
If the host country does not permit the proper implementation of this Part or any of the provisions of the AMLA, as amended, the TFPSA, or their Implementing Rules and Regulations (IRR), and other AMLC and Bangko Sentral issuances by reason of local laws, regulations or a supervisory directive, the covered person shall (1) formally notify the Bangko Sentral of this situation and furnish a copy of the applicable laws and/or regulations or the supervising
authority’s directive, as the case may be; and (2) apply appropriate additional measures or mitigating controls to manage the ML and TF risks.
What This Requires.
ProfytAI Regulatory Intelligence
Type: conditionWhere a host country's laws or a supervisory directive prevent proper implementation of this Part, the AMLA, the TFPSA, or related BSP/AMLC issuances, requires the covered person to formally notify the Bangko Sentral with supporting documentation and to apply additional measures or mitigating controls for the resulting ML/TF risks.
Relationship
Third in the same lettered 'b' sequence under Sec903; follows the one-unit obligation (OBL2) and precedes the final item in the sequence (Sec903.b.p3.OBL1), which addresses the related scenario of a host country with less-strict AML/CFT minimums.
Why This Exists
Gives the Bangko Sentral visibility into jurisdictions that block full AML/CFT compliance and ensures the covered person compensates with alternative controls, preserving its overall AML/CFT posture abroad.
Implementation Considerations
Typically involves monitoring host-country legal constraints, preparing formal notification and supporting documents for the Bangko Sentral, and designing supplementary controls calibrated to the resulting risk gap.
Interpretation Note · The duty is triggered only by an actual host-country legal or supervisory barrier; the two listed actions (notify BSP, apply additional measures) are cumulative, not alternatives; 'this Part' refers to the AML/CFT provisions being scoped.
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